Either Unsellable Or Deeply Discounted To The Point That Our Investment Is Virtually Lost
A report from the International Business Times. “The U.S. mortgage industry has been thrown into turmoil as the impact of the COVID-19 pandemic prompted millions of borrowers to fall behind on their payments. Holden Lewis, mortgage expert at NerdWallet, said he thinks the trajectory of mortgage delinquencies will follow the course of the coronavirus pandemic itself. ‘Where infections and business closures rise, mortgage delinquencies will follow weeks or months later,’ he told IB Times. FHA loans have been especially hit hard by delinquencies, McBride explained, because they have ‘lower qualification requirements and small down payments, which is not a good combination in an economic downturn.'”
“Danielle DiMartino Booth, CEO at Quill Intelligence, said she thinks that home purchasers are buying into an ‘artificial housing market’ as forbearance prevents the onset of the foreclosure cycle which would naturally act as a drag on home prices. ‘It is likely today’s buyers will be upside down in their mortgages for years to come once lenders are allowed to begin foreclosing homes,’ she cautioned.”
The Times Recorder in Ohio. “The foreclosure won’t see the effects of the COVID-19 pandemic for quite a while, said Muskingum County Treasurer Chris Hamill, simply because of the length of the foreclosure process. She did note sheriff sales have begun again after a several month hiatus because of the pandemic. Kevin McCollister, of McCollister and Associates Real Estate in Zanesville, thinks the lack of inventory might be inflating housing prices. ‘I have a little bit of concern here lately, we have had some overpriced listings go in contract at full price. That got us into an issue years ago,’ he said.”
The Prudent Press Agency on Ohio. “The Cleveland Town Preparing Commission on Friday authorised various condominium assignments. The Downtown Cleveland Alliance mentioned in a latest report that 13.7% of residences have been vacant in the neighborhood at the close of June, as opposed with 7.8% during the very same period of time last year. ‘We’re way overbuilt,’ said Doug Rate, CEO of K&D Group development firm that owns Terminal Tower and the Halle Developing, among the other folks. ‘I experience like we have three years’ supply of housing appropriate now. It doesn’t make any feeling correct now to make a new constructing.'”
The Tennessean. “Free mortgage forbearance programs created for homeowners affected by the pandemic are offering immediate relief, but it’s a ticking time bomb once the grace period is over. Additional services and mitigation needs must be met to have a chance to stop the nearing threat of foreclosures for our homeowners – a catastrophic threat to thousands of Tennesseans.”
“The entire mortgage servicer industry has now become the scapegoat for the financial responsibility of skipped mortgage payments since the start of the pandemic. These struggling and overworked mortgage servicers are giving all homeowners the required 90-day forbearance. But because of the financial hardship they are facing, many are only capable of offering the single 90-day forbearance and expect full payment of the three months skipped. Whether these homeowners are employed after the 90-day period or not, it is unlikely homeowners will be able to pay what is owed.”
“It is crucial to arrive at this solution because if servicers are unable to mitigate for new, affordable mortgages for homeowners, then this country will have an overwhelming wave of foreclosures, much worse than the 2010 foreclosure crisis. By quickly realizing the negative consequences the forbearances can have, the sooner active steps can be taken in mitigating these agreements, keeping people in their homes and the whole mortgage industry solvent. Eddie Latimer is founding director of local nonprofit Affordable Housing Resources.”
From Mansion Global on New York. “Fashion scion Massimo Ferragamo has finally found a buyer for his rambling, multi-story Park Avenue apartment on Manhattan’s Upper East Side, Mansion Global has learned. The apartment hit the luxury market just as Manhattan home prices began to struggle under a deluge of condo inventory. Since the first quarter of 2018, Manhattan’s average price per square foot for a co-op has dropped more than 12% to $1,222, according to the latest quarterly report from Douglas Elliman and appraisal firm Miller Samuel.”
“As a result, Mr. Ferragamo’s home underwent multiple price cuts and changed listing agents several times until landing with Douglas Elliman.”
The New York Post. “A new state bill would block the de Blasio administration from selling overdue taxes owed by delinquent property owners for debt collection or foreclosure amid the coronavirus pandemic. Mayor Bill de Blasio and the city Finance Department postponed a lien sale scheduled for May on the outstanding taxes, citing the COVID-19 outbreak. But the city has rescheduled the sale for as early as Sept. 4 for the tardy property taxes and water and sewer fees.”
“It was unclear how much property owners owed the city. In 2017, homeowners owed $186 million and nearly $800 million was outstanding on all properties.”
The Real Deal on Florida. “The former head of procurement at a subsidiary of Venezuela’s state-owned energy company, who was accused of money laundering by purchasing South Florida real estate, pleaded guilty. Lennys Rangel, a former procurement officer at Petrocedeno SA, a PdVSA joint venture with two European oil companies, allegedly conspired to launder millions of dollars in bribe payments through the U.S, according to a complaint filed in Miami federal court.”
“Rangel allegedly agreed to receive more than $5 million in bribes. The complaint alleges she received instructions from senior officials of PDVSA to award procurement contracts to specific contractors. Rangel allegedly used the money to purchase real estate in South Florida and in Venezuela, including unit 2015 at the luxury high-rise Brickell Flatiron. The 64-story, 527-unit tower, completed last year, was developed by Ugo Colombo’s CMC Group.”
“At least 27 people have been charged in connection to the U.S. probe into alleged corruption at Petróleos de Venezuela SA, the Wall Street Journal reported.”
From Cal Matters on California. “The severe recession that has engulfed California as the state battles the COVID-19 pandemic presents the state’s dominant Democrats with a very large dilemma. As businesses closed their doors and unemployment skyrocketed, the natural inclination of Gov. Gavin Newsom and Democratic legislators was to spend money to relieve the economic pain — but the recession also was eating into tax revenues.”
“The most ambitious of the late-blooming stopgaps may be Assembly Bill 1436, which would temporarily suspend rent and mortgage payments for Californians facing eviction or foreclosure due to loss of income. Landlords with more than a few units and mortgage lenders would be compelled to eat the losses of revenue for a year or even two, until the economy presumably has recovered, their customers presumably are back to work and everyone presumably can be made whole.”
“Those shaky presumptions are obvious potential problems with the measure, which won its initial committee vote last week after a six-hour hearing. Another is that it may violate the federal constitution because it impairs contracts and interjects the state into mortgages backed by federal guarantees.”
The Los Angeles Times in California. “Landlords need to stop whining about the unfairness of California’s eviction ban. Gov. Gavin Newsom likes to talk about California ‘meeting the moment.’ Well, for millions of renters, there’s perhaps no moment more worth meeting than Sept. 1. That’s the day — a mere eight days from now — when a statewide moratorium on evictions is set to expire and families across the state, including many families with children, could suddenly find themselves being booted from their homes into the street. As least one study has predicted that as many as 5.4 million households could go off the so-called eviction cliff.”
“To be sure, the cost of failure would be unacceptably high for a state that, in addition to the number of people living in encampments under bridges and alleys, leads the nation in poverty when the cost of living is factored in. And yet, the powerful and well-funded California Apartment Assn. and California Chamber of Commerce have come out against the last anti-eviction bill standing.”
“The bill also would provide a year of mortgage relief, allowing a pause or reduction in payments to some property owners and landlords. But they are understandably skeptical about that promise of forbearance because of concerns about whether out-of-state banks would actually honor it. Instead, they would prefer to prevent evictions by receiving tax credits in place of rent.”
“Under AB 1436, warned Debra Carlton, the apartment association’s executive vice president, landlords ‘will lose their rental units and tenants will eventually lose their homes.’ It’s a sentiment echoed by dozens of landlords and property managers who flooded my inbox after I wrote about what the coming ‘eviction cliff’ — as many have dubbed it — would do the most vulnerable California residents. ‘Why are we expected to bear nearly the entire financial burden of families who are out of work?’ one wanted to know. Another, citing the need to pay property taxes and utilities and to make repairs, demanded: ‘Who is supposed to pay these expenses?'”
“I get it. The fear of foreclosure is real, as is the painful possibility that corporate investors will come in snap up their properties. There is no doubt that what has been happening to many landlords over the last few months has been deeply unfair. But what has been happening to many tenants has been deeply unfair for a lot longer than that.”
The Nevada Current. “When the City of Henderson became the only municipality in Southern Nevada to allow short-term vacation rentals, council members said the ordinance would regulate the industry by honing in on illegal operators and making the cost of doing business prohibitive for bad actors via hefty fines. A year later the ordinance has done little, if anything, to identify unlicensed rentals or drive out chronic violators, but it’s prompted a buying spree among investors, many of them from out of state.”
“The reality is a far cry from the stated expectations of city council members who emphasized the need to regulate the burgeoning and controversial industry as a way of protecting residents who rely on short-term renters to augment their income. A review of public records reveals that of the 280 licensed STVRs in Henderson: 36 percent are held by out of state investors. 32 percent were owned by individuals prior to the ordinance. 40 percent are owned by individuals who purchased after the ordinance. 28 percent are owned by corporations.”
“Neighbors say they are concerned about filing complaints, out of fear that future potential buyers could unearth the reports while doing due diligence. ‘Who is going to buy a home with a record of calls made to Henderson Police Department and the Hotline for disturbances caused by a nearby vacation rental? I wouldn’t,’ says Sherri Green, who lives next door to an STR that is directly across the street from Nate Mack Elementary in Green Valley. ‘So, the City allows the STRs to continue operating no matter what and tells us to call the Hotline which makes our own home either unsellable or deeply discounted to the point that our investment is virtually lost.'”
“‘A home-owner should always ask the seller/agent about the owner occupancy of the neighborhood/complex, which usually can be obtained from the HOA,’ says Dr. Vivek Sah of UNLV’s Lied Real Estate Institute. ‘Additionally, lenders who do their due diligence properly will not lend to any complex that has a higher rental percentage than 20 percent.'”
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Ann Arbor, MI Housing Prices Crater 13% YOY As Detroit Suburb Housing Demand Plummets
https://www.zillow.com/ann-arbor-mi-48104/home-values/
*Select price from dropdown menu on first chart
As a noted economist said, “Housing prices are cratering everywhere.”
‘keeping people in their homes and the whole mortgage industry solvent. Eddie Latimer is founding director of local nonprofit Affordable Housing Resources’
I included this to show these affordable housing people are generally REIC shills. Kiss my grits Eddie, these servicers are bashtards.
Mount Sinai, NY Housing Prices Crater 14% YOY As The Bottom Falls Out Of Suburban Housing Market Across NY/NJ/CT
https://www.zillow.com/mount-sinai-ny/home-values/
As one broker bemoaned, “We never been this slow in my 30 year career in this business.”
What’s the common theme? Guberments creating a huge mess. STR, high prices, rents, taxes, money laundering. It’s all fun til somebody loses an eye.
‘ The fear of foreclosure is real, as is the painful possibility that corporate investors will come in snap up their properties’
There’s that canard again.
‘There is no doubt that what has been happening to many landlords over the last few months has been deeply unfair. But what has been happening to many tenants has been deeply unfair for a lot longer than that’
So it’s payback. I’m a big believer in federalism. If you want to run a socialist sh$t-hole, go ahead. But if you want the rest of us to bail you out – pound sand.
What’s the common theme? Guberments creating a huge mess.
And they keep making it worse and worse. The whole goal is to prevent prices from falling. When did the government decide it was their duty to do everything possible to make shelter costs as burdensome as possible for the middle class an poor, and keep them that way?
Well, let’s give credit to the heads of FHFA and CMHC for trying to do the right thing. I am referring to the past decade or decades. The 40 year clusterfark at Fannie and Freddie, then the Mel Watt disaster era. This editorial at the LAT for instance: sure they are all commie on the editorial page, but not at the daily “Hot Property” section, (which has now turned into a regular tale of woes).
‘Those shaky presumptions are obvious potential problems with the measure, which won its initial committee vote last week after a six-hour hearing. Another is that it may violate the federal constitution because it impairs contracts and interjects the state into mortgages backed by federal guarantees’
Oh, that! You people live in a fairy land.
‘the cost of failure would be unacceptably high for a state that, in addition to the number of people living in encampments under bridges and alleys, leads the nation in poverty when the cost of living is factored in’
A poverty stricken fairy land.
‘FHA loans have been especially hit hard by delinquencies, McBride explained, because they have ‘lower qualification requirements and small down payments, which is not a good combination in an economic downturn’
You don’t say…
‘she thinks that home purchasers are buying into an ‘artificial housing market’ as forbearance prevents the onset of the foreclosure cycle which would naturally act as a drag on home prices. ‘It is likely today’s buyers will be upside down in their mortgages for years to come once lenders are allowed to begin foreclosing homes’
It’s not surprising to see bankrate begging for that half point of free cheese back, but it’s disappointing to read Booth do the same. Even as she acknowledges these buyers are getting fooked as we type. The fee is intended to dissuade unqualified borrowers and shore up the GSE’s, which are toast anyway.
The fee is intended to dissuade unqualified borrowers
If the utter unafforability of the shacks doesn’t dissuade them, an extra closing cost won’t do it either.
The new fee applies to GSE refis only. They are already loanowners.
‘Additionally, lenders who do their due diligence properly will not lend to any complex that has a higher rental percentage than 20 percent’
Again, lenders drop all that “we’re in this together” BS when it suits them.
Mount Sinai, NY Housing Prices Crater 14% YOY As The Bottom Falls Out Of Suburban Housing Market Across NY/NJ/CT
https://www.zillow.com/mount-sinai-ny/home-values/
As one broker bemoaned, “We never been this slow in my 30 year career in this business.”
‘The pandemic continues to expose the rolling civic disaster that is Mayor Bill de Blasio’s approach to homelessness. Last week, just days after he bowed to the fury of Upper West Side residents and vowed to start moving homeless out of hotels, downtown Brooklyn woke to find homeless being dumped in hotels there.’
‘The city ramped up its use of luxury and boutique hotels as shelters months ago, aiming to protect the homeless from the virus. Meanwhile, the NYPD — overstretched by the crime spike and likely under orders to lay off the homeless — has been turning a blind eye to encampments and other problems.’
‘The result: “anti-gentrification” in such neighborhoods as the Upper West Side and Chelsea.’
‘Nor does he yet offer a timeline for ending the Upper West Side’s nightmare. Three hotels there — the luxury Belleclaire on Broadway, the Lucerne on West 79th Street and the more down-market Belnord on West 87th Street — are housing the mentally ill, registered sex offenders and “recovering” drug addicts. And locals have seen big upticks in public urination, open drug use and catcalling.’
‘Michele McDowall, a 39-year-old nanny, told The Post, “It doesn’t feel safe anymore,” adding that she was recently offered crack by two homeless men as she pushed a 2-year-old down Riverside Park at 79th Street.’
‘The situation is so bad, a Facebook group has formed in which residents post photos of men peeing, masturbating and lying sprawled and passed out near the hotels, The Post reported.’
‘One longtime UWS resident, Eve Epstein, had a suggestion for de Blasio in a post on the West Side Rag blog: “Rather than preaching faux compassion, citizens should insist that our limousine liberal Mayor move his family into Hotel Lucerne — without his security detail.”
‘Meanwhile, Midtown residents have reported visibly intoxicated, unmasked men getting into disputes with one another. In Chelsea, the homeless encampment at West 24th Street and Sixth Avenue has grown from two “residents” pre-pandemic to 15 to 20 vagrants, who’ve built makeshift shelters out of flower pots, plastic kiddie gates or shopping carts.’
https://nypost.com/2020/08/22/covid-19-homeless-horrors-expose-failure-of-de-blasios-enabling/
I said months ago this thing could turn into a black hole.
As always, a large share of NY (and CAs) homeless are from broken homes elsewhere.
The difference during the last decade, compared with the 1990s, is that a large share of those flooding in have been white.
My observation around the Las Vegas metro area (where I live) is that nearly all the homeless people I see are white.
So much for that white privilege.
I saw that in Portland too. White, and young. Some of them didn’t even have presence of mind to crawl under a blanket or back up against a wall. They were just zonked out right in the middle of the sidewalk.
It must be the heroin. Did they really all start taking heroin because they were on painkillers for a legit medical condition? That’s a LOT of people with medical conditions, that young. The worst thing is that most of them will never be employable. They will be wards of the state for 30-50 years.
Back in the 1970s, the white homeless you saw on NY streets were the neglected seniors the Boomers had left behind, the “Bag Ladies.”
https://www.nytimes.com/1981/09/29/opinion/bag-ladies.html
Now the Boomers are seniors, and it is the young, their children, who are in the streets.
“It must be the heroin. Did they really all start taking heroin because they were on painkillers for a legit medical condition? That’s a LOT of people with medical conditions, that young. The worst thing is that most of them will never be employable. They will be wards of the state for 30-50 years.”
With enough Oxycontin the cold weather doesn’t bother them, and eventually they wake up in heaven. Bliss!
Christiana, TN Housing Prices Crater 23% YOY As Nashville Suburbs And Rural South Housing Prices Drop Like A Rock
https://www.zillow.com/christiana-tn/home-values/
*Select price from dropdown menu on first chart
As a noted market maker commented, “I wouldn’t pay a nickel for a house right now. Not with the way the bottom fell out of the market.”
I just got this email:
‘The Food and Drug Administration (FDA) has approved an Emergency Use Authorization (EUA) requested by Mayo Clinic for use of plasma from patients who recovered from COVID-19 to treat hospitalized patients.’
“The tipping point for the agency appeared to be that ‘optimal’ patients who were treated with ‘convalescent plasma at the highest [antibody] titers’ showed ‘significant clinical benefit’ of a 35% improvement in survival, which ‘clearly meets the criteria published for an EUA,’” stated FDA Commissioner Stephen Hahn.’
‘The idea is not new. Before the discovery of antibiotics, type-specific serum from recovered patients was used to treat otherwise hopeless pneumococcal pneumonia.’
‘Yet, while approving the plasma treatment before controlled clinical trials can be done, FDA continues to obstruct the use of a long-established antimicrobial that can also be used in outpatients, to prevent the need for hospitalization.’
‘FDA denied a request for EUA of hydroxychloroquine (HCQ) for preventive and early treatment of COVID-19 filed by Dr. John McKinnon’s team at Henry Ford Hospital in Detroit, supported by Dr. Peter McCullough’s cardiology team at Baylor Heart and Vascular Institute in Dallas.’
‘A clinical trial of HCQ given early in hospitalized patients at Henry Ford Health System showed a 51% reduction in mortality.’
‘Because of FDA’s negative statements about HCQ, patients are having great difficulty in obtaining HCQ. This could cost tens of thousands of lives, according to Yale professor of epidemiology Harvey Risch. Dr. Risch told Mark Levin he has never seen anything like the current campaign to suppress use of or even information about a life-saving treatment.’
‘The Association of American Physicians and Surgeons filed suit against FDA’s arbitrary restrictions in June, and has now asked the Sixth Circuit Court of Appeals to order FDA to release the Strategic National Stockpile of HCQ to pharmacies willing to dispense it to the public.’
‘For further information, see AAPS Emergency Motion.’
‘For information on the “natural experiment” of early use vs. nonuse of HCQ—a 79% difference in mortality—see hcqtrial.com.’
‘never seen anything like the current campaign to suppress use of or even information about a life-saving treatment’
But, science?
That and a bunch of other things…. The President enjoys interfering with the trough filling for the pigs.
Buckle up for a Trump landslide.
DonK.
It’s been clear for a while there are people and organizations that want to make this situation worse than it need be.
It’s been clear for a while there are people and organizations that want to make this situation worse than it need be.
Like this guy:
Biden says he would be open to shutting the economy down to halt the spread of COVID-19
https://www.marketwatch.com/story/biden-says-he-would-shut-economy-down-to-stop-spread-of-covid-19-2020-08-23
“It’s been clear for a while there are people and organizations that want to make this situation worse than it need be.”
Since this coroanvirus cr@p was shoveled out, I know of 3 families who lost kids who overdosed (fentanyl) 2 people who died from cancer and one kid from a car accident. Although I live in Florida where the positive tests can be seen in the MSM lighting up like the Debt Clock and you would think I would be stepping over corona corpses that couldn’t be kept in refrigerated trucks to get to my front door and I grew up in Greenwich Ct. an area where I still have many family members and friends I keep in touch with I still don’t personally know of one, not one COVID19 death or hospitalization.
For those who do, I am sorry. Just like I am sorry for those in the U.S. who last year lost family members or friends to…
Heart disease: 647,457
Cancer: 599,108
Accidents (unintentional injuries): 169,936
Chronic lower respiratory diseases: 160,201
Stroke (cerebrovascular diseases): 146,383
Alzheimer’s disease: 121,404
Diabetes: 83,564
Influenza and Pneumonia: 55,672
Nephritis, nephrotic syndrome and nephrosis: 50,633
Intentional self-harm (suicide): 47,173
All 77 false-positive COVID-19 tests came back negative, NFL testing partner cites ‘isolated contamination’
The NFL just had a false alarm with its COVID-19 testing
By Tyler Sullivan
10 hrs ago
1 min read
The NFL went through one of its biggest COVID-19 scares of training camp after there were 77 positive tests that came about on Saturday. Upon further examination for this spike, however, it was revealed that these were false-positives as Tom Pelissero of the NFL Network reports that all of the original tests were rerun on Sunday night and each of them came back negative for the coronavirus. Those 77 individuals also underwent additional testing and all of those tests came back negative as well.
https://www.cbssports.com/nfl/news/all-77-false-positive-covid-19-tests-came-back-negative-nfl-testing-partner-cites-isolated-contamination/
Buckle up for a Trump landslide.
I wouldn’t bet on it. The globalist oligarchs and their Democrat Quislings are going all out to exploit the scamdemic to destroy the economy and pin the blame on Orange Man Bad.
https://tomluongo.me/2020/08/23/bidens-speech-use-covid-to-destroy-everything-blame-trump/
The globalist media has already achieved its goal. They’ve already won over the Dem hearts and minds. Look the cancel culture, the slanted language, the disappearing comment sections, the stifling of dissent. They accused Trump of instigating Russian interference, but the globalist media has done a far better job than the Russians ever could.
They are all united against Trump. They will not dilute themselves with Jill Stein or a protest non-vote again. Unless Trump can bring out even more voters that he didn’t bring in 2016, or somehow sway all of the Libertarians to his side, he will lose.
It it exploitation if he really is bad? I mean you’d have to be pretty dumb and live on another planet not to catch him in a lie every few seconds.
you’d have to be pretty dumb and live on another planet not to catch
The globalist MSM’s narratives and tactics.
MSM’s narratives and tactics
Scott Adams debunking the “drinking bleach” and “very fine people” hoaxes, Biden doubling down on the “very fine people” hoax in his DNC speech, and various MSM tactics
All the foot stamping in the world can’t prevent Trumpys re-election.
Meanwhile, there has been barely a peep about Ivermectin, and I’m not sure whether to be displeased or thankful about that. Touting it now would help save current patients, but if they wait until September there will be some RCT study results.
Glad to hear there are lawsuits against the FDA.
Dr. Risch told Mark Levin
Full interview: https://youtu.be/zyh7W7wHj3o
Are you enjoying the lottery market?
Outside the Box
Opinion: Investors have discarded this common-sense indicator in recent months — and that shows just how out of whack this record-setting stock market is
Published: Aug. 24, 2020 at 10:30 a.m. ET
By Abraham Thomas
It’s as if investors suddenly prefer lottery tickets
…
Global dividends suffer worst quarterly fall since financial crisis
Published: Aug. 24, 2020 at 1:51 p.m. ET
By Lina Saigol
The worst-case scenario could see global shareholder payouts drop 25% on an underlying basis during 2020
…
Cratering dividends should be bullish for higher stock prices, right?
Because like a drunkard who always has a reason to party, the stock market always has a reason to rally.
I guess the day traders on Robin Hood don’t care about dividends.
Commentary
‘Misguided lockdowns have destroyed the global economy, and the impact is likely to last for years. The fallacy of the “lives or the economy” argument is evident now that we see that countries such as Taiwan, South Korea, Austria, Sweden, or Holland have been able to preserve the business fabric and the economy while doing a much better job managing the pandemic than countries with severe lockdowns.’
‘One of the most alarming facts about this crisis is the pace at which bankruptcies are rising. Despite an $11-trillion liquidity and government aid injection, stocks and bonds at all-time highs, and sovereign as well as corporate yields at all-time lows, companies are going bust at the fastest pace since the Great Depression. Why? Because a solvency crisis can’t be disguised by liquidity.’
‘Trillions of liquidity are giving investors and governments a false sense of security because yields are low and valuations are high, but it’s a mirage driven by central bank purchases that can’t disguise how quickly companies are entering into long-term solvency issues. This is important, because soaring bankruptcies and the rise in zombie companies means less employment, less investment, and lower growth in the future.’
‘Liquidity only disguises risk; it doesn’t resolve solvency issues driven by collapsing cash flows while costs remain elevated.’
‘According to the Financial Times, “large U.S. corporate bankruptcy filings are now running at a record pace and are set to surpass levels reached during the financial crisis in 2009. As of Aug. 17, a record 45 companies each with assets of more than $1bn have filed for Chapter 11 bankruptcy.”
‘In Germany, about 550,000 companies are at risk of being considered insolvent and being zombified by a pointless “insolvency law” that simply extends the pain of businesses that are technically bankrupt. In Spain, the Bank of Spain alerted that 25 percent of all companies are on the verge of closing due to insolvency.’
‘According to Moody’s estimates, more than 10 percent of businesses in the leading economies are in severe financial stress, many in technical bankruptcy.’
‘How could this happen? Since the 2008 crisis all policy actions have been aimed at keeping sovereign bond yields low and bailing out bloated government spending and deficits, and the massive liquidity injections have benefited the large quoted companies that have used the money to shield their valuations through buy-backs and cheap debt.’
‘However, cheap money has also triggered malinvestment, poor capital allocation, and higher-than-normal levels of debt. Small businesses didn’t see the alleged benefits of the massive liquidity and deficit programs, while large companies became too comfortable with elevated levels of debt, poor return on capital employed, and solvency ratios that were simply too low in a growing economy.’
‘Cheap money and massive bailouts have planted the seeds of a solvency crisis that was triggered by the irresponsible decision of some governments to shut down entire economies.’
‘Governments will prefer to go down the Japan route: more debt, more bailouts, and massive government spending. However, that will only lead to stagnation and perpetuating imbalances that can’t be hidden when the mistakes of Japan are implemented by the eurozone, China, and the United States.’
‘There’s no possible way in which large spending and liquidity binges will deliver anything but higher debt, weaker growth, and lower real wages.’
‘To end the zombie firm problem and the risk of even more bailouts, we need more open market, less red tape, and more flexible re-structuring mechanisms. Anything else will simply deliver stagnation.’
https://epochtimes.today/bankruptcies-soar-in-a-sea-of-liquidity/
“…the massive liquidity injections have benefited the large quoted companies that have used the money to shield their valuations through buy-backs and cheap debt….”
Wonder how many of those companies are REIT’s?
Vinings, GA Housing Prices Crater 16% YOY As Suburban Atlanta Home Values Get Torched
https://www.zillow.com/vinings-ga/home-values/
*Select price from dropdown menu on first chart
As one broker commented, “If you bought a house in the last 20 years, you’ll be underwater soon if not already.”
If you add up transfer payments (Social Security, Medicare, Medicaid, SNAP etc) and government sector earnings, as a percent of the total personal income of the residents of each state, New York was slightly below average in 2018. (But New York had by far the highest taxes as a percent of personal income).
You can see where your state stood in a table here.
https://larrylittlefield.wordpress.com/2020/08/24/big-government-where-it-is-by-state/
So, has anyone looked at the numbers? For New York, it isn’t a socialist shithole, its a crony capitalist shithole.
Those private sector earnings? An unusually large share of them classified as capital gains, and taxed at a lower rate, for those at the top. And an unusually large share of them classified as “self employment” income with no benefits and paying both halves of FICA, for those at the bottom. We are all day laborers now.
Los Angeles County, with about the same population as NYC, shows the same pattern.
The mayor is a socialist or worse. He goes around quoting Marxists to reporters.
Turns out he has redistributed income up like the rest of them, to the public unions and real estate industry. To call him a socialist is to give him too much credit.
Having given away the store, he asked the teachers union to show up to work in person, because the disadvantaged require child care and actual teaching. And they told him to go to hell.
Did he actually read enough Marx to quote it?
So, has anyone looked at the numbers?
I am currently looking at your spreadsheet, and at spreadsheets I opened from the BEA site, and trying to figure out how you calculated everything.
Did you get CA05 by state and select the latest year? And then its just transfer payments divided by personal income, government earnings divided by personal income.
If you go to the NY Years tab, you’ll see the line codes — 10 for total personal income, 47 for personal current transfer receipts, 2000 for government and government enterprises.
The state codes are just the states plus DC in alphabetical order. The 5-digit FIPS are the state plus (3-digit) county in alphabetical order.
But they have the words. And then it’s just division.
Go to personal income by state, or personal income by county or metro.
And go to “interactive data.”
Lots of stuff there. You can see the share of workers who are self employed, earnings by sector, etc.
“Danielle DiMartino Booth, CEO at Quill Intelligence, said she thinks that home purchasers are buying into an ‘artificial housing market’ as forbearance prevents the onset of the foreclosure cycle which would naturally act as a drag on home prices. ‘It is likely today’s buyers will be upside down in their mortgages for years to come once lenders are allowed to begin foreclosing homes,’ she cautioned.”
I’m having a little trouble understanding her argument. We know the Fed is terrified of deflating prices, and will do anything in its power to prevent housing prices from falling, as they did with QE3 circa 2012.
So is her argument that the Fed won’t bother to repeat the price support measures that were enacted in the aftermath of the 2007-2009 financial crisis, or that they will be unsuccessful in their efforts this time?
It also is worth mentioning that home prices dropped ALOT in the 2007-2012 period before the reflation measures were instituted.
Poor Danielle forgot there’s no more free market, only rigged asset prices.
Maybe Danielle has got some good points, but as soon as she left the Fed, she was suddenly everywhere, being interviewed by more financial news TV and Youtube channels than I can count. Seems suspiciously ho-like to me.
Housing prices cratered 45% during the last minor correction. Prices are down double digits already and we’re just getting started with this one.
BLM arson attacks overnight in Kenosha, Wisc. spread to the Bradford Community Church, a far-left universalist religious organization. The church’s sign in support of #BlackLivesMatter
was consumed in flames:
https://twitter.com/MrAndyNgo/status/1297912931699404800
It’s a 7 second clip of the sign burning in front of the church.
Looks like a good place to not buy a house.
Feel-good story of the day. Thanks for posting, 401.
Looks like a good place to not buy a pack of gum or anything else for that matter.
Did you recently get kicked in your shorts?
The Financial Times
Coronavirus business update 30 days complimentary
US equities
Bets against US stocks drop to 15-year low as market rallies
Short-sellers left nursing heavy losses from jump in tech share prices
Traders on the floor of the New York Stock Exchange. Mark-to-market losses on short positions now sit at $383.5bn since the March lows.
© Bloomberg
Richard Henderson in New York yesterday
Short positions in US stocks have dropped to their lowest level in more than a decade, as this year’s record-breaking rally inflicts big losses on investors seeking to profit from declining share prices.
Short interest as a proportion of market capitalisation for the median stock in the S&P 500 index fell to 1.8 per cent at the beginning of this month, according to figures from Goldman Sachs, the lowest since the bank began tracking the data in 2004. That compares to 2 per cent at the start of the year, and an average of 2.4 per cent over the past 15 years.
For tech and health stocks, the year’s best performing sectors, short positions relative to market value now stand at or close to the lowest level for the period analysed by the bank.
The US stock market tumbled earlier this year as the Covid-19 pandemic spread around the globe. From the previous market peak in February to its lows in March, short positions notched up paper gains of $375bn, according to S3 Partners, a data provider.
But stocks have since rebounded sharply, adding more than 50 per cent to the value of the S&P 500, taking it to a record closing high last week. Mark-to-market losses on short positions now sit at $383.5bn since the March lows.
Stocks with the biggest amount of short interest have fared better than those with the least, intensifying the blow for short sellers, according to IHS Markit, a data provider.
…
Imagine having been short Tesla this whole time. Man, that’s got to be expensive.
Short positions in US stocks have dropped to their lowest level in more than a decade, as this year’s record-breaking rally inflicts big losses on investors seeking to profit from declining share prices.
I suppose this is why they say “don’t fight the FED.” When you fight the printing press, you lose.
Did you recently get kicked in your shorts?
The Tesla shorts definitely have been!
Comrade Pelosi just called Republicans “domestic enemies of the State.” When the DNC starts soliciting bids for the construction of the Gulag, I hope they use the same companies that build their “affordable housing.”
https://www.theblaze.com/news/pelosi-gop-domestic-enemies-state
The lady doth project too much, methinks.
FHA loans have been especially hit hard by delinquencies, McBride explained, because they have ‘lower qualification requirements and small down payments, which is not a good combination in an economic downturn.’”
Now that right there is why Holden gets paid the big bucks.
‘It is likely today’s buyers will be upside down in their mortgages for years to come once lenders are allowed to begin foreclosing homes,’ she cautioned.”
Or they could just walk away en masse, Danielle. Gosh, I sure hope that doesn’t impair the underlying collateral on all those mortgage-backed securities.
‘I have a little bit of concern here lately, we have had some overpriced listings go in contract at full price. That got us into an issue years ago,’ he said.”
You must be some kind of genius, Kevin.
https://finance.yahoo.com/news/leon-cooperman-says-fed-fuels-162258145.html
It took the U.S. “244 years to go from zero national debt to $21 trillion,” he said. “We will probably end this year with $27 trillion.
“Who pays for the party when the party is over?”
IIRC, didn’t the US have debt even before we officially formed as a country? I vaguely recall that Thomas and Alexander got into a tussle over that.
Yes they did. They owed the French big time. It actually cost Louis XVI his head. Americans should never forget that!
“Who pays for the party when the party is over?”
Anybody with anything left. All governments, local, state and federal, are going to tax the living bejeezus out of everyone and everything.
“Free mortgage forbearance programs created for homeowners affected by the pandemic are offering immediate relief, but it’s a ticking time bomb once the grace period is over.
Some of the local Joe Biden supporters who congregate at Memorial Park in downtown Colorado Springs drinking Mad Dog 20/20 think that offers immediate relief, too, but that hangover’s going to be a biatch.
By quickly realizing the negative consequences the forbearances can have, the sooner active steps can be taken in mitigating these agreements, keeping people in their homes and the whole mortgage industry solvent. Eddie Latimer is founding director of local nonprofit Affordable Housing Resources.”
F**k you, Eddie. The sooner parasites like you and the FBs you recklessly signed up for mortgages they can’t afford become insolvent, the sooner affordable housing can return for the prudent and responsible.